Cutting cost for your small business
By Sarah Kolb
The economy may be turning around, but there are still companies out there that are struggling, still looking for ways to cut costs without negatively impacting their day-to-day operations. Employers are beginning to breathe easier, but layoffs, pay cuts, and benefit reductions are still very real options, and cutting costs has never been a higher priority.
As an employer, what can you do to cut costs other than laying off your workers? Sometimes, the little things can make the difference between keeping a good worker and decreasing your staff. Small cutbacks can combine into real savings, which can help your company — all of you, together — weather the tough times.
Here are just a few ways to cut costs — they may seem small, but every little bit helps!
Employees, who typically are not privy to your company’s electric bills, may not realize just how much small businesses pay to keep their place of business physically open. Encourage your employees to turn their computers off at the end of the day. Imagine what a difference turning off a roomful of computers overnight can make.
Here’s an example. Say you have eight computers in your office. In a typical 9-to-5 work environment, that’s 16 hours of electricity you’d save, per computer, per evening. That’s 640 unnecessary hours of computer run-time per week that you could be saving. See how things can add up?
Another great way to save on electricity is installing motion lights in your office, break room, and even bathrooms. If you need a security light in your building, consider installing special lights that don’t use as much electricity, and turning everything else off at night. Your new, reduced electricity bill might shock you.
Cut out the Disposables
Many workplaces have a break room, and break rooms are typically stocked with paper plates, plastic forks, and paper towels. To cut down on things that need frequent replacement, consider purchasing dishes. While this can be expensive, it doesn’t have to be — if you can spare 20 bucks, head over to your local Salvation Army and stock up. There are frequently gently used complete dish sets to be found on the cheap, and hilarious used coffee mugs are always an interesting conversation piece.
Or, consider asking your employees to bring their own — if you mention that you’re cutting costs to avoid layoffs, are your employees likely to argue with you?
Eliminate the Extras
Many companies have a culture of providing happy hours, lunches, pizza parties, or other extras. But in tough times, those extras need to be the first to go. Again, your employees should be able to appreciate that their sacrifice is going toward a good cause — enabling them to keep their job.
If cuts of this type seem a little too drastic, you might try changing the structure of these extras to increase production. If you frequently offer a monthly lunch outing, consider turning it into a challenge — the top five earners this month get to go out for lunch instead of the whole office. This will keep your costs down while keeping your employees focused on the bottom line.
These are just a few examples of simple things you can do to cut costs around the office. Don’t be intimidated by having to be the “bad guy” — get your employees together, explain that your ultimate goal is to retain jobs, and ask them to help you brainstorm. If your staff knows where you’re coming from, they should be eager to help out and sacrifice the little things.
These are great tips from Manta. If you would like a free consultation on insurance protection for your small business, ask us about our Business Owners Policy (BOP). This is insurance designed specifically for Small Business Owners.